8 Ways to Check If a Token Is a Scam

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The blockchain industry is rife with promises of quick and easy profits. Identifying which projects are secure and which are destined to fail within months is crucial. This article outlines eight methods to help traders avoid token scams effectively.

1. Start with the Basics

To verify a token's legitimacy, begin with the most accessible methods:

2. Verify Code on Etherscan

Check if the token’s smart contract code is verified on Etherscan (or your preferred blockchain explorer).

3. Check Etherscan’s Comment Section

Block explorers often have comment sections. Look for:

4. Cross-Reference DappRadar’s Blacklist

Compare the token’s address against DappRadar’s GitHub blacklist. If listed, it’s a scam.

5. Validate Token Details on Indexes

Legitimate tokens typically appear on platforms like CoinGecko or CoinMarketCap. If absent or flagged with warnings (e.g., "Unverified"), exercise extreme caution.

6. Assess Exchange Listings

👉 Compare liquidity pools on Uniswap for deeper analysis.

7. Inspect Liquidity Pools

Check liquidity locked in DEX smart contracts (e.g., Uniswap V2):

8. Use Third-Party Analysis Tools

Leverage these tools to audit tokens:

ToolPurpose
Smell TestAuto-audits tokens (score 0–100; lower = higher scam risk).
HoneypotIdentifies deceptive smart contracts designed to trap users.
DEXtoolsTracks real-time prices and evaluates token value.

FAQs

Q1: Can a token be safe if it’s only on DEXs?
A1: Yes, but risk is higher. Many scams thrive on DEXs due to lower oversight.

Q2: How reliable are Etherscan comments?
A2: Highly reliable if multiple users report scams. Always cross-verify.

Q3: What’s the #1 red flag for token scams?
A3: Unverified smart contract code combined with anonymous teams.

Q4: Are all tokens on CoinGecko safe?
A4: No—but listing requires some vetting. Use additional checks.

Q5: How do I report a scam token?
A5: Flag it on Etherscan, DappRadar’s blacklist, or community forums.


Key Takeaways

Stay vigilant—scammers evolve, but these methods help you stay ahead.

👉 Explore more Web3 security tips to protect your investments.